Project Manager as Owner’s Representative: How the Delivery Model Works

Most building owners hire a general contractor and let that firm buy out the work, mark up the trades and manage the site. It is familiar, but it puts a layer of commercial interest between the Owner and the people building the project.

ACOT offers a different arrangement: the Project Manager (PM) acts as the Owner’s Representative. There is no general contractor. Instead, there are several subcontractors, and the PM oversees all of the construction activity while representing the interest of the Owner.

How the model is set up

The structure is simple to describe and takes discipline to run well.

• The work is broken into packages. The PM divides the project into five or six manageable bid packages.
• Every subcontractor is prequalified. Each one is prequalified by the PM and provides the bond and licenses required for their portion of the work.
• The Owner signs the contracts. All subcontractor contracts are signed by the Owner, while the PM administers them and makes sure each is executed per plans and specifications.
• One person is accountable. The PM is responsible for the total successful delivery of the project and is the Owner’s single point of contact.

What changes for the Owner

Because the PM’s allegiance is to the Owner, the incentives line up differently from a general contracting arrangement. On the projects where ACOT applies this approach, the benefits it sets out are:

• Savings of 10 to 20% on overall construction cost
• Project completion that can be shortened by almost 90 days
• No contractor markups on materials and subcontractors
• Fewer ambiguous change orders
• Adequate logistics, cost control and scheduling, and an earlier start on permitting
• Power and control of the project cost and schedule kept in the hands of the Owner

The trade-off

There is one real cost. Splitting the work into packages means more effort on the designer’s side, because the documents have to be organized by package rather than issued as a single set. In ACOT’s experience, that cost is small compared with the cost of using one general contractor.

When it fits

The model suits Owners who want direct control of cost and schedule and are prepared to sign trade contracts themselves, with a PM they trust to run them. It relies on knowing the local market, permits and environmental requirements, which is where ACOT’s over 30 years of personnel experience in the construction industry, and over 20 years as a company, come in.

If you are weighing delivery options for an upcoming project, talk to the ACOT team or read more about our program and project management services.